RETRO DROP
Effective April 1, 2015, the Retro DROP program will only apply to members with 23 years of credible service as of April 1, 2015.
The retroactive deferred retirement option plan, referred to as Retro DROP, is a one-time benefit paid at retirement to a member with a subsequent associated reduced monthly annuity. To be eligible a member must qualify with a normal service retirement of 23 years at any age, excluding pre-membership military or permissive service credit. The maximum amount of service to be used in computation of the Retro DROP after normal service retirement of 23 years is 36 months.
On the election of Retro DROP, and the selection of the Retro DROP benefit computation date, the member’s monthly retirement option is computed as if the member had retired on the chosen Retro DROP benefit computation date. The Retro DROP benefit balance will include the accumulated monthly benefits after 23 years with retiree COLA’S, multiplier increases, member contributions and a 5% simple interest calculation on December 31st for balances on deposit as of January 1st of the same calendar year.
A member who elects Retro DROP receives a one-time benefit with a reduced monthly retirement benefit at retirement date. Permissive Service Credit purchase is not allowed in combination with this DROP program.
Certain selections of options and beneficiary designations other than a surviving spouse may have adverse consequences under the Internal Revenue Code of 1986, which may cause a reduction in the amount of benefit payable. Members are urged to consult their attorney or tax advisor prior to a final selection of an option.
Forward DROP
The Forward DROP, is a one-time benefit that allows Group A active members to defer their annuity benefit payment into a DROP account while still working and before actual retirement.
There are two Forward DROP options known as the Five Year Forward DROP and Seven Year Forward DROP. To be eligible for the Five Year Forward DROP, Group A members must have at least 23 years of creditable service by February 17, 2016. The maximum period allowed to defer annuity payments in the Five Year Forward DROP is 60 months. Group A members who achieve 23 years of creditable service after February 17, 2016, will only be eligible for the Seven Year Forward DROP. The maximum period allowed to defer annuity payments in the Seven Year Forward DROP is 84 months.
A Member's election to participate in the Forward DROP is irrevocable. See all applicable rules for the Five Year or Seven Year Forward DROP in the policies listed below.
Certain selections of options and beneficiary designations other than a surviving spouse may have adverse consequences under the Internal Revenue Code of 1986, which may cause a reduction in the amount of benefit payable. Members are urged to consult their attorney or tax advisor prior to a final selection of an option.